The U.S. Securities and Exchange Commission (SEC) has turned down two 19b-4 applications for spot Solana ETFs submitted by Cboe BZX on behalf of issuers, according to a report from The Block. Following this rejection, the applications were removed from Cboe’s website. Sources reveal that the SEC’s primary concern involves classifying Solana (SOL) as a security, a viewpoint the agency has previously articulated in court documents.
SEC and Issuers Face Tensions
Following the SEC’s rejection, the applications did not get published in the Federal Register, thus halting the approval or rejection process. The 19b-4 applications are submitted by the exchange on behalf of issuers and only kickstart the SEC’s approval process once they appear in the Federal Register.
In contrast, the S-1 registration statement is prepared by the issuers and comes without any time constraints, adding another layer of complexity to the ETF approval process.
Spot Solana ETFs Struggle for Approval
Currently, 21Shares and VanEck are battling for SEC approval of their spot Solana ETFs. The removal of 21Shares’ S-1 form from the SEC’s EDGAR system suggests the company has possibly retreated. Conversely, VanEck’s S-1 form remains active, with VanEck’s head of research, Matthew Sigel, affirming the validity of their application.
Although the rejection of the 19b-4 applications presents a setback, these forms can be resubmitted or fortified with stronger arguments to demonstrate that Solana is not a security. This ongoing debate is crucial for the future of spot Solana ETFs.
Key Takeaways for Investors
- Investors should closely monitor SEC’s stance on classifying Solana as a security.
- Changes in the status of S-1 registration forms may indicate strategic shifts by ETF issuers.
- Resubmission of applications with improved arguments could eventually lead to approval.
As a result, the regulatory landscape for spot Solana ETFs remains highly dynamic and uncertain. Companies like 21Shares and VanEck continue their efforts, reflecting their commitment to broadening investor access to cryptocurrencies in the U.S. market and beyond. However, the road to approval is fraught with regulatory challenges that require strategic navigation.